Revolve Group LLC (NYSE: RVLV) stock surged 15.01% on June 19th, 2019 (as of 10:25 am GMT-4; Source: Google finance) as the stock is rising since its recent listing. Revolve’s company strategy places its emphasis on the millennial and Generation Z demographics by tracking their trends and behaviors in the retail space. This allows the company to order appropriate products with a smaller amount of risk that their competitors generally face when making purchasing decisions. The stock slightly corrected over 2.6% on 20th June, 2019 (Source: Google finance)
Going forward, the company has expressed its plan to continue building upon its social media presence powered by a network of over 3,500 influencers and social events that drive significant traffic to its website. By targeting influencers that aren’t necessarily ones with the most recognizable names, RVLV continues to attract savvy customers that follow individuals with a smaller following but a far greater engagement. The company has already attributed its influencer marketing strategy for delivering as much as $650 to $750 million in revenue a year, with a target of $1 billion in 1 to 2 years.
Further, RVLV has also invested heavily in the development of an iconic mobile app that makes it easier than ever for customers to browse and purchase products instantaneously. The company is preparing to launch an updated app across all platforms that will highlight the benefits of its loyalty program and easily detect consumer spending habits that redirect consumers to the most appropriate page.
Moreover, for 2018, net sales came in at $498.7 million with a gross margin of 53.2%. Net income increased from $5.3 million to a staggering $30.8 million over the year, largely driven by the mentioned 79% net sales delivered at full price. The company had On average, 9.4 million unique visitors per month in 2018 with average order sizes of $279 are on a steady growth trajectory to increase throughout 2019 as the company gains global traction. Revolve’s adjusted EBITDA has also rapidly increased from $9.52 million in 2016 to $46.49 million in 2018. With an increasing free cash flow position valued at $23.61 million in year-end 2018 and new capital thanks to a successful IPO, the company has more funds than ever to continue strategic spending on investing activities to increase active users and order volumes while building upon its already iconic and well-received brand.
Additionally, during the next 6 to 12 months, multiple expansion channels featuring increased investment in influencer marketing, new features and capabilities from Revolve’s digital apps, and the rollout of the company’s own merchandise will drive growth rapidly and surprise investors.